How Much Health Insurance Do You Need in India?

Life is uncertain and anyone can get sick or injured at any time. With rising medical expenses in India, health insurance has become more of a necessity than a choice. The COVID-19 pandemic has also encouraged a lot of people to buy medical insurance but buying the right coverage amount is still a matter of concern. Let’s find out the ideal health insurance coverage amount for different individuals.

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      What is the Right Health Insurance Coverage That You Should Buy?

      The right health insurance coverage amount varies from one person to another. However, there are two rules that you must follow to choose the right coverage amount for your health insurance policy. They are:

      • Your medical insurance coverage amount should be at least 50% of your annual income.
      • Your coverage amount should be able to cover the cost of a coronary artery bypass graft at your preferred hospital.

      How Much Health Insurance Should You Buy?

      If you want to buy health insurance for yourself, then you must opt for a coverage amount equivalent to at least half of your annual income. For instance, if your annual income is Rs 8 lakh, then you must opt for a health insurance cover of at least Rs 4 lakh.

      However, healthcare expenses have increased tremendously in the last few years. In this situation, opting for a lower health cover, even if it is equivalent to 50% of your salary, may not be enough. Hence, insurance experts advise people to opt for a minimum health insurance cover of Rs 5 lakh to cover their medical expenses comfortably.

      Moreover, if you buy insurance in the early 20s, the chances of raising a claim are lower in early adulthood. As a result, you will be able to increase your sum insured at no extra cost with the help of a cumulative bonus on every claim-free year.

      How Much Health Insurance Should You Buy for Your Family?

      Just like yourself, you need to cover your entire family under a medical insurance policy. This is because a medical emergency can occur with any member of your family at any time and a single hospitalization can severely reduce your family’s savings. To avoid such a situation, insurance experts advise a family of four to opt for a minimum health insurance cover of Rs 10 lakh.

      The good thing about buying medical insurance for your family is that you can opt for a family floater plan and reduce your premiums substantially. Under family floater plans, a single sum insured is shared by all insured family members on a floater basis. Since you do not have to buy individual health policies for each family member, it lowers your overall premium costs. Besides, the chances of all family members raising a claim in the same year are very low.

      For example,

      Suppose the premium for a family health policy of Rs 10 lakh is Rs 20,000 and the cost of an individual health policy of Rs 5 lakh is Rs 10,000. So, if you buy an individual health policy for four family members, you will have to pay a total premium of Rs 40,000. However, you can get the same coverage on a floater basis under a family health insurance plan for Rs 20,000.

      How Much Health Insurance Should You Buy for Your Parents/ Senior Citizens?

      Senior citizens and parents are most vulnerable to illness and diseases. They require health insurance the most as they are more likely to develop a medical condition or get hospitalized. Given the medical inflation today, bypass surgery can easily cost up to Rs 2 lakh in a good hospital while a small surgical procedure can easily cost you up to Rs 1 lakh.

      Hence, senior citizens and parents require a health policy with a high sum insured amount. You can opt for health insurance for parents or senior citizen health insurance with a high sum insured to ensure adequate coverage.

      But with an increase in the sum insured, the premium will also increase. Insurance companies generally charge a higher premium to senior citizens as they are more likely to raise a claim. Thus, make sure to check the premium of the health insurance policy before buying it for your parents or senior citizens.

      Things to Keep in Mind While Choosing the Right Health Insurance Coverage Amount

      Here are some things to keep in mind while choosing the right health insurance coverage amount:

      • Age of the Insured – The age of the person to be insured should be considered while deciding the coverage amount. The higher is the age of the person, the higher sum insured amount should be opted. This is essential because you are more likely to fall sick as your age increases.
      • Medical History – The medical history of a person should be checked before choosing a coverage amount for the policy. A person with pre-existing diseases may need to raise frequent claims. As a result, you should go for a higher coverage amount if you have a medical history.
      • Type of Hospital – The type of hospital where you plan to avail treatment should be considered at the time of deciding the policy coverage amount. Treatment at a reputed private hospital will cost you more than in a government hospital. Hence, a higher sum insured should be opted by people who prefer reputed private hospitals.
      • Ability to Afford – Your income and the ability to afford a health insurance plan should be kept in mind while deciding the coverage amount. If your income is limited and you cannot afford to pay costly premiums, then you must opt for a lower sum insured.
      • Supplementary Plan – If you have a supplementary health policy, such as a group health insurance policy, then you can opt for a lower sum insured while buying medical insurance. This is because you are already getting medical coverage from your employer and thus, do not need to buy another policy with a high coverage amount.

      Summing It Up

      Buying health insurance with an adequate sum insured is a basic necessity for everyone today. It is important to opt for a medical insurance coverage amount that sufficiently covers your medical expenses today as well as in the years to come. Do remember to keep the above-mentioned rules and factors in mind while deciding the right coverage amount for your health policy.

      FAQs

      • Q1. Is 5 lakh health insurance enough?

        Ans: A 5-lakh health insurance is adequate if the insured lives in a second-tier city or town. However, in case the insured is living in a metro city like Delhi, Mumbai, or Gurgaon, more than 5 lakh health insurance may be needed. It is advisable to get a health insurance plan that is higher than 5 lakhs. Considering that the insured has dependents living with them, it is advisable to purchase a health insurance plan that is at least 50 lakhs to 1 Crore.
      • Q2. How much coverage is sufficient for health insurance?

        Ans: When purchasing a health insurance plan, it is important to ensure that a sum assured of 2 to 3 times the individual’s salary is adequate. However, it is also important to note that the sum insured should be higher according to age. For example, if an individual is above the age of 40 years, they should invest in health insurance that is at least three to five times higher than their salary.
      • Q3.What is the limit of health insurance coverage in India?

        Ans: There is no limit on the amount of coverage for a health insurance policy in India. Several health insurance policies provide up to Rs. 1 Crore to Rs. 2 Crore in health insurance coverage.
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      *All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

      **All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.

      *₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

      *₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

      *₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

      *₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

      *No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

      *The values taken for effective cost calculation are indicative values and may change as per the selected plan.

      *Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

      *Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

      *The scope of coverage may vary from plan to plan.

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